A rare sight: minimum wage shrinks in a major U.S. city

We’re accustomed to seeing the minimum wage move in either a progressive direction or remaining stagnant and not moving at all. What we don’t generally see is a minimum wage shrinking.

Welcome to St. Louis, Missouri, where locals have benefited from a $10 minimum wage for several months – until today. The St. Louis Post-Dispatchreported over the weekend:

That’s because on Monday, employers in the city of St. Louis will no longer be bound by the local ordinance that mandated a minimum wage of $10 an hour in the city. A state law passed on the final day of the 2017 legislative session takes effect Monday, overriding the St. Louis ordinance and lowering the floor to $7.70 an hour.

To be sure, we’ve seen some instances in which Republican-led state governments have intervened to block city-wide minimum wage increases before they took effect – see Birmingham and Cleveland, for example – but what makes St. Louis unusual is that the city’s increase, following a lengthy court fight, already took effect earlier this year.

In other words, the GOP-imposed preemption law will take away an increase that locals have already enjoyed. And while it’s not yet clear how many employers will take advantage of the change, roughly 35,000 local workers could be affected.

In an apparent attempt at a defense, Missouri Gov. Eric Greitens (R) said last month that a $10 minimum wage would “kill jobs,” adding, “And despite what you hear from liberals, it will take money out of people’s pockets.”

That’s an odd thing for a governor to say about a policy that will shrink St. Louis’ minimum wage from $10 an hour to $7.70 an hour. Is Greitens under the impression that this will put money into people’s pockets?

If nothing else, this will certainly be an area of study for economists, who routinely examine the economic effects of minimum-wage hikes: what happens when a major American city lowers the wage floor? I suspect it will lead to more hardship on those who can least afford it, but I guess we’ll see the results of this conservative experiment soon enough.